Minnesota's legislators didn't get Obama's Mideast memo

Divestment bill will withdraw pension funds from Iran's oil sector

It was the Persian New Year, March 20, and President Obama had just sent a video message to the people and leaders of Iran. In it, he said it was "time for a new beginning" between Washington and Tehran. A more diplomatic tone suddenly seemed not only possible, but imminent.

That same day, inside the Capitol in St. Paul, a committee debate was underway. The discussion at hand was so out of sync with the geo-political developments transpiring beyond the marble dome, it was as though the assembled state representatives were play-acting.

Rep. Ryan Winkler—a DFLer from Golden Valley who looks considerably younger than his 34 years—addressed the House Finance Committee. He pushed for a bill that would require the state to withdraw all state pension funds from foreign companies doing business in Iran's oil and gas sector, which would total some $250 million.

courtesy of the Minnesota Senate

Terri Bonoff originated the bill on the Senate side

courtesy of the Minnesota Senate

Sen. John Marty says the move could cost $2 to $3 million in brokerage fees

The intent was to send a message to the Iranian regime that Minnesota, for one, will not tolerate the Persian nation's sponsoring of terrorism.

But in making his case, the second-term Democrat put forward an argument smacking more of Bush-era neo-conservatism than state-level prairie populism.

"Many of you may know that Iran is one of four nations that is on the U.S. list of state sponsors of terrorism," Winkler warned. "Recently, there have been reports that Iran has acquired enough nuclear material to build a weapon. This bill is consistent with the foreign policy of the United States."

The bill handily passed through committee and is scheduled to be voted on sometime in the coming weeks. What would become known as the Iran Divestment Bill originated, on the Senate side, from Sen. Terri Bonoff (DFL-Minnetonka).

"I'm generally opposed to military force, so to use economic sanctions is something that is strongly preferred," she says. "We need to make sure that Iran has a clear indication that we do not support the proliferation of nuclear weapons."

With the bill making its way in and out of committees, Minnesota was set to join 14 other states in divesting pension funds from Iran. But unlike similar bills in other states, this one had critics perplexed, even outraged, at its unusual timing. The push for divestment came on the heels of President Obama's call for diplomacy. Just last week, Obama reiterated that Iran has some right to nuclear energy, provided it can prove it's for peaceful purposes.

The move has some Iranian-Americans in Minnesota incensed at mixed messages.

"This is absolute nonsense," says Omid Mohseni, an associate professor of engineering at the U of M. "I find it fascinating that just as the current president is trying to reach out diplomatically to Iran, Minnesota Democrats are going back to Bush-era rhetoric concerning Iran. I'm appalled."

In crafting the bill, Bonoff says she relied primarily on input she received from the Jewish Community Relations Council of Minnesota and the Dakotas, a pro-Israel lobbying group based in Minneapolis. The organization, like many, is dismayed by Iranian President Mahmoud Ahmadinejad's repeated anti-Semitic outbursts, Holocaust denial, and threats to wipe Israel off the map.

During previous months, representatives from the council aggressively lobbied state lawmakers of both parties, making the case in no uncertain terms that Minnesota must take action.

"We started studying the issue about a year and a half ago," says Steve Hunegs, the group's executive director. "It was one of our major legislative goals for this session. This is a regime that has threatened to destroy Israel, denies the Holocaust, executes gays, and is on the U.S. list of state sponsors of terrorism. "

Still, not all lawmakers were swayed by the organization's efforts. Sen. John Marty (DFL-Roseville) is the most vocal critic of the divestment bill. He takes issue with state-level legislators meddling in foreign policy and questions the overall efficacy of divestment. Also, he points out that divesting doesn't come cheap—it will cost the state between $2 and $3 million in brokerage fees, according to estimates by the State Investment Board.

"Is Iran's government a good government? Of course not," says Marty. "It's done some horrid things. But it's not like the human rights workers there are saying we need to do this. Rather, there seem to be some Americans effectively saying, 'This is a way we can sound tough on terrorism. Whether it makes sense or whether it's counterproductive, that doesn't matter. At least we'll sound like we're tough.'"

But Marty's misgivings put him in the clear minority. On May 11, the bill passed 50 to 16 in the Senate, enjoying bipartisan support. Two days later, it passed 106 to 22 in the House and made its way to Gov. Tim Pawlenty, who promptly signed it into law. The measure goes into effect August 1. There's no reason to believe it will have any effect on the Iranian regime's behavior.

"We've had sanctions of some kind on Iran for almost 30 years," says Trita Parsi, founder and president of the National Iranian American Council and an expert on U.S.-Iranian relations "If they're so successful, why haven't they been able to change Iran's behavior? If anything, bills of this nature make it easier for the Iranian regime to blame the U.S. for problems, instead of having their own incompetence and corruption be the subject of debate."